Sovereign investors rush to gold, broaden their focus to AI adopters

The global shift toward a weaker US dollar and rising geopolitical fragmentation is accelerating a structural rethink by central banks in regard to reserve management, with gold emerging as the standout strategic hedge.

As a preview to our 14th edition of the Invesco Global Sovereign Asset Management Study, releasing summer 2026, we conducted a short pulse survey of a select group of sovereign investors with total assets under management of $0.8 trillion. The survey gathered insights from central banks and sovereign wealth funds across regions. The results highlight gold’s continued importance, both as a stabilising asset within portfolios and as a hedge against geopolitical risks.

Gold demand strengthens amid dollar weakness and sanctions risk

Against a backdrop of persistent US dollar depreciation and growing concerns over asset freezes, central banks are reassessing the level and structure of their gold holdings. The latest insights from the survey indicate gold is becoming increasingly important as a strategic diversifier, particularly for institutions whose currency flexibility is constrained and must manage portfolios through periods of heightened stress.

Why gold has reemerged

Many central banks now explicitly link gold to sanctions resilience, noting physical gold, particularly when held domestically, offers a degree of protection against asset freezes other reserve assets cannot match. This attribute has taken on added significance amid increasing geopolitical uncertainty.

The strong price performance of gold in 2025 has also sharpened internal debates, with institutions acknowledging a desire not to “miss the rally” again. With structural and policy-related constraints limiting the ability of institutions to reduce their US dollar exposure in the near term, many describe gold as the practical and immediate lever available within their reserve management toolkit.

How central banks are holding gold

As allocations rise, the discussion is shifting from whether central banks should hold gold to the more operational question of how they should hold it. Central banks indicated that gold ETFs are increasingly viewed as a viable route to scaling exposure efficiently, particularly when speed or flexibility is required. At the same time, physical gold appears to be the preferred long-term form of ownership, driven by sovereignty considerations and custody arrangements. For some institutions, political sensitivities around repatriation are also a factor, influencing how (and where) holdings are maintained. This intensified examination of implementation options underscores a broader evolution: gold is no longer treated merely as a symbolic or legacy asset but is instead being actively managed as a strategic holding within reserve portfolios.

“This year’s conversations show a clear pivot: central banks are no longer asking whether to hold gold, but how to scale and store it. That’s a profound shift in institutional mindset.” — Josette Rizk

AI momentum broadens beyond Big Tech as sovereign investors shift focus

The survey interviews show AI is an increasingly important, as it remains the fastest growing thematic area in sovereign wealth fund portfolios, but its centre of gravity is shifting from “builders” to “adopters,” with growing interest in real world use cases. Sovereign investors describe AI as an “enabling layer” now spreading well beyond a narrow group of technology names, widening the opportunity set across sectors and asset classes.

Proceeding with caution around the potential AI bubble

Despite this momentum, sovereign investors remain disciplined. Concerns over elevated valuations and benchmark concentration (especially in US tech) continue to temper enthusiasm, with several respondents expecting a familiar cycle of a strong narrative acceleration followed by a shakeout. As one APAC sovereign wealth fund cautioned, “There may be a bubble phase first, and then the dominant winners emerge.”

Managing security and decision-making risks

Operationally, AI adoption inside sovereign institutions is expanding, but within strict boundaries. The primary gains so far come from productivity and workflow enhancement — research synthesis, drafting support, and coding efficiency — rather than investment decision making. This is partly due to governance constraints around sensitive data, prompting many organisations to build internal only AI environments and maintain tight control over model use.

These governance frameworks focused on security, auditability, and operational stability mean institutions deploy AI cautiously and methodically. AI is helping teams work faster and more efficiently, but for most it is not yet trusted to steer portfolio decisions, reflecting the high bar for risk management across sovereign and central bank mandates.

Resilience emerges as a defining investment priority for 2026

Against a backdrop of shifting macroeconomic regimes and heightened geopolitical uncertainty, institutions are prioritising strategies designed to withstand a wider range of market environments.

Sovereign investors reported an increase in the use of enhanced stress testing and scenario analysis. This approach reflects a broader move toward building portfolios capable of absorbing shocks while maintaining long-term stability.

Preparing for change

A key theme emerging from the interviews is the growing emphasis on diversifying underlying risk drivers. Sovereign investors are reassessing traditional assumptions about correlation and liquidity, ensuring portfolios are better positioned for structural market changes and unexpected disruptions.

Within private markets, sovereign wealth funds are looking at secondaries as an increasingly important resilience tool, a way to adjust exposures without abandoning allocations. This results in a more “maintainable” portfolio that can be repaired and rebalanced as conditions evolve.

“Resilience is no longer just a defensive stance. It’s becoming an increasingly important component of portfolio design for sovereign investors.” — Josette Rizk

This survey was conducted as a precursor to the Invesco Global Sovereign Asset Management Study 2026, which will be published in the summer of 2026.